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The effect of sporting moments on their sponsors

Date published: Friday 16th October 2015 9:57

For individual sports fans, whether they’re living in Spain, the UK, Italy, Brazil or almost anywhere else on the planet, tournaments that take place on the international stage are always massively significant events.

For some, an event like 2014’s Brazilian World Cup becomes the central point around which their life is planned. For others, their team’s fortunes on the pitch can dictate their mood for weeks. However, beyond the heartbreak and jubilation of the fans, events like 2014’s World Cup in Brazil make a major impact in other key areas. When an epic sports event like the Rugby World Cup, the Olympics or the FIFA World Cup takes place, both the host country and those of all the qualifying teams will feel the effects in a number of key areas.

In the months and weeks leading up to a global sports competition various parties spring into action. Sponsors are perhaps the most active. The FIFA World Cup, for example, is an extremely significant event for sponsors, built as it is around the world’s most popular sport and therefore commanding an unbeatable level of exposure. During 2013, in the run-up to the 2014 tournament in Brazil, FIFA pocketed a gargantuan $404 million from sponsors, a figure that represented almost 30% of the organisation’s total yearly revenue.

With sport comes celebration and socialising which, in many countries, means alcohol. For pubs the party spirit is great news, not just in the host country but across borders where punters stay up late and drink at unusual times while they watch their matches. Many countries, including the UK, amend their licensing laws to ensure publicans can take full advantage of the extra business. In the 2003 Rugby World Cup, the makers of Guinness, Diageo, saw a 9.8% rise in their shares during the tournament. Famously, this was year when England made it to the final and actually won its first ever Rugby World Cup.

However, like everyone else with a vested interest in the World Cup, those in the pub trade know that should their country bow out in the early rounds, the profits made on booze are likely to see a negative impact. That was exactly the case when England lost their place in 2014’s World Cup during a shame-faced draw with Costa Rica.

Businesses operating in the tourism sector within host countries rightly regard global sporting events as real coup for their profit margins. Hotels, tourist attractions close to stadiums and transport providers are all almost guaranteed a profit boost when a major sports event takes place. Last year during the World Cup Brazil welcomed one million tourists to its shores, each of them bringing extra money to the country’s economy.

Each of the factors discussed here, the sponsors, the increased alcohol sales and the vast number of tourists, impact on another key area of the economy – employment. When a country hosts an event on this scale many jobs are created. Although most of these posts will be temporary, their existence still serves to bolster the economy.

From the everyday fan to the pub landlord, through to the hotel or tourist attraction, via the big name sponsor and the job seeker, a major sporting event will always shake things up, sometimes in unpredictable and invigorating ways.